Enter your revenue and total costs to see net profit, profit margin and return on cost.
Profit is what is left after you subtract total costs from revenue. Divide profit by revenue and multiply by 100 for the profit margin. With $5,000 of revenue and $3,200 of costs, profit is $1,800, a 36 percent margin. Include overheads and tax in costs to move from gross toward net profit.
Profit
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What Is Profit?
Profit is what remains after you subtract your total costs from your revenue. It is the single clearest measure of whether an activity makes money, and turning it into a margin lets you compare periods or products of different sizes.
What you include in costs decides whether the result is gross or net profit. Direct product costs alone give gross profit; adding overheads, wages and tax moves you toward net profit.
How to Calculate Profit and Margin
Profit = Revenue - Costs and Margin % = Profit / Revenue x 100With $5,000 of revenue and $3,200 of costs, profit is $1,800. That is a 36 percent profit margin and a 56.25 percent return on the money spent. The calculator shows all three at once.
How to Read Your Result
The main figure is profit in dollars. The margin box measures it against revenue, and the return-on-cost box measures it against what you spent, which is always the larger of the two percentages when revenue beats cost. A negative result means a loss, shown in red-free plain numbers with a minus sign.
More detail
Gross vs Net Profit
Gross profit counts only the direct cost of what you sell. Net profit also subtracts overheads, wages, marketing and tax, so it is always lower. Be clear which one you are calculating by choosing what goes in the costs field.
To view the same numbers at the price level, use the margin calculator, or price up from cost with the markup calculator.
Turning Profit Into Cash Flow
Profit on paper is not the same as money in the bank, because timing of payments and expenses matters. Pair this with a cash flow calculator to see when the cash actually arrives.
What counts as a cost here?
Whatever you include. For gross profit, enter only the direct cost of the goods or service. For net profit, add overheads such as rent, wages, marketing and tax.
What is the difference between profit margin and return on cost?
Profit margin measures profit against revenue, while return on cost measures it against what you spent. The same profit gives a lower margin than return on cost whenever revenue exceeds cost.
Can profit be negative?
Yes. If costs are higher than revenue, the result is a loss, shown here as a negative profit and a negative margin.
What is a healthy profit margin?
It depends heavily on the industry. Some high-volume businesses run on single-digit margins, while others expect much more. Compare against typical figures for your sector.
Is my data saved?
No. The calculation happens in your browser and nothing you enter is stored.
Sources
- Profit margin explained (Corporate Finance Institute).
- Net profit margin formula (Corporate Finance Institute).
- Gross profit definition (Corporate Finance Institute).
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The formula and worked example on this page are checked for accuracy against standard references. View profile
This calculator is for general information and planning only and is not financial, tax, accounting or legal advice. Results are estimates based on the figures you enter. Confirm important decisions with a qualified professional. Spotted an error? Let us know.
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